Moving past military applications

A couple of weeks ago, NewVenturist featured a story about how important the military is to spawning robotics companies. The military has needs and money to spur development of the technologies that form the foundation of many startup robotics companies. And the military doesn’t care if a company is only a couple of people or if it has outside investors. So, when the military invests in a robotics-based startup, through Small Business Innovative Research (SBIR) awards and other mechanisms, it allows companies to focus on innovative basic research, something which is difficult to do via commercial funding. Such a company is Neya Systems.

Founded in 2009 by Parag Batavia, a Carnegie Mellon PhD in robotics, Neya is a leader in unmanned robotics systems. The company’s technology is based on open standards and open architectures which afford it greater flexibility and broader market appeal. Leveraging SBIRs and military contracts, Neya has perfected its technology and has multiple military agencies as customers. Neya is now transitioning to the commercial sector, proving that the military can spawn robotics companies.

Neya is one of many Carnegie Mellon-related companies that stem from CMU’s strong Robotics Institute. Parag is proud of his CMU heritage, telling me, “CMU has a strong impact in robotics companies and in government labs; most of the major robotics centers of excellence in the US have a high level of CMU involvement.”

Prior to Neya, Parag was the Director of Projects and Operations at Applied Perception, a robotics company founded by two other robotics CMU PhD grads, Todd Jochem and Dean Pomerleau. In 2007 API was acquired by Foster-Miller, which itself was owned by QinetiQ North America, a leading company providing solutions for important problems in aerospace, defense and security. Heavily involved with the general robotics community, Parag is on the board of the Robotics Technology Consortium and is on the Executive Committees of both the SAE Joint Architecture for Unmanned Systems Committee (AS-4) and the Unmanned Aircraft Systems Control Segment Architecture Working Group.

Parag worked at several other robotics companies and initiatives before API. He learned a lot about how to develop robotics technologies in response to need rather than just as cool mechanics. He stayed at Foster-Miller for a couple of years after the acquisition and continued to learn. After founding Neya, he worked alone in the company for the six months. In May 2010, he hired Neya’s first employee. By January 2011, Neya was up to four people besides Parag. Today the company has an experienced team of nine senior robotics professionals. Many of them were former API employees, recruited back to the region by the opportunity presented by Neya.

Revenues are roughly an 80-20 mix of DoD and commercial sales. Neya had achieved early success with its contract R&D portfolio in mobile robot navigation and mission planning. Parag has grown his company through revenues alone and has no outside investment. The company’s revenues have increased by over 100% per year with sales this year in the low millions.

Like other Pittsburgh robotics companies, including RE2, Neya has made use of SBIRs and is a model for the program’s impact. Neya has received three Phase I awards to date, has one ongoing Phase II award, has been recently awarded a Phase II, and is applying for another Phase II. The awards have led to commercialization: “We are not interested in just getting grants for grants’ sake; we need the high-risk funding provided by the SBIR program to develop the technology that we need to go to market. I don’t know how we would do that without the SBIR program.”

Like many startups with government funding (and contracts), Neya is juggling multiple projects at any one time. While all involve unmanned vehicles and systems, the resulting systems vary from high-speed mobility to mission planning to analyzing produce. “You have to have a niche focus,” Parag tells me. “But you also have to be smart about what is needed and go where the need is.”

On the commercial side, Neya is working on multiple projects also. One is a retrofit capability for a company that does range clearance on land that has been used for munitions testing. “There are thousands of acres on military bases that are overgrown with weeds and trees. Remediation of this land requires removal of this left over ordnance. It’s a multi-hundred million dollar business.”

Parag sees much more commercial work coming in the near future: “It’s harder in some ways to get customers because the commercial sector is more risk averse, but we are making inroads. The DoD work shows that we can deliver technology that works and achieve successful performance.”

Parag is convinced that it’s a good time to be a small company in this space. He is confident that in the next two years he will move his ratio of DoD to commercial revenues to 50-50. I am sure that he will succeed.

This post is sponsored by Innovation Accelerator, the private side of a public-private partnership with the National Science Foundation to make America more competitive through innovation. This post is part of a series on robotics and entrepreneurship being published in New Venturist Summer, 2012.